Reviving his “Abenomics” script, Prime Minister Shinzo Abe emphasized that his government and party will continue to focus on achieving fiscal consolidation and across-the-board prosperity at the Liberal Democratic Party convention on Sunday.
Abe devoted more than half of his 20-minute speech at the 81st annual gathering trumpeting the successes of his radical economic strategy and citing encouraging data on gross domestic product, jobs data and winter bonuses.
“Numbers do not lie,” Abe told the 3,300 party members in attendance. “We succeeded in blowing away the thick, black cloud that was hanging over Japan two years ago.”
In fact, economic indicators support Abe’s triumphant banter. According to the Regional Economic Report released by the bond-gobbling Bank of Japan this month, all nine regions have enjoyed a “recovery” — a word that hasn’t been used to describe all regions in the report since April 2005.
Abe’s campaign to raise wages also seems to be making headway. Some big corporations, including life insurers, reportedly plan to increase compensation.
But it’s not clear yet how small and midsize enterprises, which account for 99.7 percent of corporate Japan and employ 70 percent of its workforce, will respond.
Abe will also be tested after April, when the consumption tax rises to 8 percent. Abe pledged to cushion the blow and kick-start a healthy economic cycle with a ¥5.5 trillion stimulus package and ¥1 trillion in tax breaks after the Diet opens for its first session on Friday.
Staving off the negative effects of the tax hike is crucial for Abe: The second-stage jump to 10 percent in October 2015 hinges on it. Abe has said he will make a final decision on the second hike by the end of the year.
In a notable switch, Abe spent far less time discussing his disruptive national security agenda, apparently to avoid reminding voters of why they shortened his first term in 2007. For the first time since taking office, his approval rating dipped below 60 percent right after the ruling coalition steamrollered the unpopular state secrets law through the Diet last December.
Abe made no mention of his intention to amend the pacifist Constitution to let Japan exercise the right to collective self-defense, an issue that a government panel is scheduled to report on in April. Yosuke Isozaki, a special adviser to Abe, said the government aims to approve the report before the Diet closes for the summer in June.
The LDP’s platform, however, lacked a pledge included in its last one: that Japan will never again wage war. But it did keep another: that members will continue to visit war-linked Yasukuni Shrine, as Abe did without warning last month.